QR National (QRN)

QR National
’s shares have received a fillip from the group’s deal with the Queensland government earlier this month to buy back $1 billion worth of stock. The railroad group’s shares, which were trading at around $3.47 before the deal was announced, are now trading at $3.73 – levels last seen in April. Investors, who are pleased some of the long-standing overhang of stock held by the Queensland government is being reduced, are expected to approve the buyback at the group’s annual general meeting next month. Analysts point out QR National still has enough financial flexibility to buy back more stock when the government sells down the remainder of its stake, which will be 18 per cent once the initial sale of $1.5 billion of its shares is completed. Commonwealth Bank argues the railroad group has the “balance sheet capacity" to gear up through more buybacks, allowing it to steadily increase dividends.